The untapped potential of tobacco taxation in Kenya

Kenya stands at a critical crossroads in its battle against the tobacco epidemic. On one hand, the country has made commendable strides in tobacco control through legislation and public awareness campaigns.

On the other, it continues to fall short of a key weapon in this fight: effective taxation. Tobacco taxation isn’t just an economic tool it’s a proven public health intervention that could save thousands of lives and significantly bolster the economy. Yet, our current tax policies are akin to fighting a forest fire with a water hose.

As it stands, cigarette taxes in Kenya constitute 32% of the retail price. This falls far below the 75% threshold recommended by the World Health Organization (WHO) to effectively curb tobacco consumption.

Cigarettes with filters, for instance, are taxed at Sh4,067.03 per mille.  while Cigarettes without filters (plain cigarettes) are taxed at Sh2,926.41 per mille. This implies that for every 50 packets of cigarettes, the government generates Sh4,067.03 for filtered cigarettes and Sh2,926.41 for unfiltered cigarettes. 

Nicotine pouches and liquid nicotine for electronic cigarettes are taxed at Sh 1,595.00 per kilogram and Sh 74.41 per milliliter, respectively.

Despite these figures, recent developments have shown that the tobacco industry continues to influence Kenya’s fiscal policies. According to a January 2024 report by Africa Intelligence, Big Tobacco is actively steering Nairobi's cigarette tax revamp to ensure favourable outcomes for their industry. This undue influence undermines Kenya's commitment to reducing tobacco consumption and protecting public health (Africa Intelligence, 2024).

Tobacco use in Kenya claims an estimated 6,000 lives annually, translating to 16 lives lost each day a grim reminder of the toll this addiction takes on our communities. Beyond the staggering human cost, the economic impact is equally harrowing. Tobacco-related illnesses, including lung cancer, heart disease, and chronic obstructive pulmonary disease, drain an estimated Kshs. 2.8 billion annually from Kenya’s economy. This figure includes healthcare costs and lost productivity, placing an undue burden on an already strained healthcare system.

Kamukunji Sub-county, a known hotspot for tobacco and nicotine products use, offers a stark illustration of this crisis. With its dense population, high unemployment rates, and thriving informal markets, the constituency serves as a microcosm of Kenya’s broader tobacco-related challenges. Public health facilities in the area are inundated with cases of tobacco-related illnesses, often among young people who began smoking as teenagers.

The link between increased tobacco taxes and reduced consumption is well-documented. A report by the Tobacco Atlas shows that a 10% increase in the price of tobacco products leads to a 4–8% decrease in consumption, with the largest impact observed among young people and low-income groups. Countries like South Africa and the Philippines have successfully implemented higher tobacco taxes, resulting in significant declines in smoking prevalence.

The economic benefits are equally compelling. In Thailand, for example, higher tobacco taxes generated substantial revenue that was reinvested into public health programs. Kenya, too, has the potential to channel additional tax revenue into healthcare, education, and smoking cessation programs resources desperately needed in communities like Kamukunji.

The tobacco industry often argues that higher taxes will lead to an increase in illicit trade, but evidence suggests otherwise. A 2019 study by the World Bank found that strong enforcement measures, coupled with tax hikes, can effectively mitigate illicit trade. Kenya’s robust tax administration infrastructure, including the Excise Goods Management System (EGMS), provides a solid foundation for tackling this challenge.

Additionally, higher taxes do not necessarily harm the economy. On the contrary, reducing tobacco consumption alleviates the long-term financial burden of tobacco-related illnesses, freeing up resources for other pressing needs.

Raise Taxes to WHO Standards: The government must immediately increase the tax burden on tobacco products to at least 75% of the retail price. This will make tobacco products less affordable, particularly for young people and low-income users.

Invest in Public Health: Revenue from higher taxes should be earmarked for public health initiatives, including smoking cessation programs, awareness campaigns, and improved healthcare services in tobacco hotspots like Kamukunji.

Strengthen Enforcement: To combat illicit trade, Kenya should invest in advanced tracking and tracing systems and enhance penalties for non-compliance.

Engage Communities: Public health interventions must be tailored to local contexts. In Kamukunji, for instance, community-based programs could educate residents about the dangers of tobacco and offer support for those looking to quit.

Youth-Focused Campaigns: The youth are often the primary target of the tobacco industry. National campaigns that resonate with young people, coupled with stricter age-verification measures for tobacco sales, can help curb early adoption.

Kenya has the tools, knowledge, and resources to lead the charge against tobacco. What it lacks is the political will to implement the bold measures needed to turn the tide. Tobacco taxation is not just about generating revenue; it is about saving lives and creating a healthier, more equitable society. For communities like Kamukunji, this could be the lifeline they desperately need.

The time for half-measures has passed. Kenya must seize this opportunity to raise tobacco taxes, reinvest in public health, and secure a brighter, smoke-free future for its citizens. Failure to act will only prolong the suffering of thousands and leave an indelible stain on our nation’s conscience.

Martha is programmes manager while David is the director; Den of Hope, a CBO